Epic Games will pay a total of $520 million over allegations from the FTC that it violated children’s privacy law and used tactics to trick players into making purchases they never intended to make in Fortnite.
For the FTC, this is a record-breaking settlement in regards to the gaming industry, with $275 million being paid as a monetary fine for its violation of the Children’s Online Privacy Protection Act (COPPA), and another $245 million being used by the FTC to refund consumers.
This is also the FTC’s largest administrative order in its history, which would sound like a more severe measure taken, if the $520 million didn’t still struggle to truly make a dent in Epic’s profits.
Especially when considering that in its first two years of existence alone, Fortnite made over $9 billion.
The FTC also alleged that Epic’s on-by-default settings for voice and text communication in Fortnite is harmful to children.
“The FTC alleges that these default settings, along with Epic’s role in matching children and teens with strangers to play Fortnite together, harmed children and teens.
Children and teens have been bullied, threatened, harassed, and exposed to dangerous and psychologically traumatizing issues such as suicide while on Fortnite.”
The $275 million monetary penalty will go to the U.S Treasury, while the $245 million will go to the FTC for it to distribute refunds to players.
On top of the settlement, Epic will have to delete all the personal information it has since collected, barring it obtaining parental consent for users under 13, something it is already working to fix with its newly introduced Cabined Accounts.
Epic will also have to create and establish a privacy program that’ll work to addressing the issues the FTC lists, and be subject to regular auditing by an independent party.
When the FTC is talking about the tactics Epic used to trick players, it’s talking specifically about dark patterns, which it says Epic used to trick players into making purchases by changing around button configuration.
“For example, players could be charged while attempting to wake the game up from sleep mode, while the game was in a loading screen, or by pressing an adjacent button while attempting to simply preview an item.
These tactics led to hundreds of millions of dollars in unauthorized charges for consumers.”
The FTC goes on further to allege that Epic ignored the calls from consumers and employees to change things like its on-by-default voice and text communication, and when Epic did make changes, things were only made worse.
This piece has been updated to accurately portray the FTC’s ruling and Epic’s efforts regarding its violation of children’s privacy through unauthorized data collection.
Source – [FTC]